Bloodbath Could Herald "Great Depression"
Seven months after President Barack Obama gave a State of the Union speech in which he said the economy was in "recovery mode" and that "the stock market has come roaring back," the New York Times today all but admits that America has entered a double dip recession following yesterday's 512 point Dow plunge, while others go further, warning of a new Great Depression as markets continue to plummet today.
Why it takes a dramatic fall in the stock market for the establishment media to admit something that's been painfully obvious in almost every other sector of the economy for the last 2 years goes right to the heart of the split between Wall Street and Main Street.
Rising unemployment, crumbling house prices, record food stamp usage, and the soaring price of gold as a barometer of dollar depreciation are three key reasons why contrarians have been warning all along that the economy was in fact getting worse and that talk of a "recovery" was deluded at best and crazy at worst.
For refusing to go along with the happy clappers by putting the blinkers on when it comes to the real measurements of economic health and not the phony, casino-style stock market, people like Gerald Celente and Max Keiser were accused of engaging in "pessimism porn" even as their forecasts played out.
Americans who believed the propaganda about the non-existent "recovery" and failed to move their assets into safe havens will feel stabbed in the back now that the Old Gray Lady finally admits the 2008 recession never really ended. But it really serves them right for placing trust in an establishment that has lost all credibility.
Under the headline, Time to Say It: Double Dip Recession May Be Happening, Floyd Norris highlights how the recession was significantly deeper than we were first told, and the so-called "recovery" was notably overestimated.
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"Last week the government announced its annual revision to the numbers for the last several years. New government surveys indicated Americans had spent less than previously estimated in 2009 and 2010 on a wide range of things, including food, clothing and computers. Tax returns showed Americans even cut back on gambling. The recession now appears to have been deeper — a top-to-bottom fall of 5.1 percent — and the recovery even less impressive. The economy is still smaller than it was in 2007," writes Norris.
Thursday's market bloodbath also prompted John Lonski, chief economist at Moody's Investors Service in New York, to predict a return to recession. "I now think the odds are uncomfortably high for a double dip," he said.
But Peter Morici, a professor at the University of Maryland business school and former chief economist for the U.S. International Trade Commission, went further, warning of a crisis to rival the fallout of 1929.
"If we go down a second time, it will be the Great Depression," he said. "Last time (during the long recession) you didn't see armies of men roaming the country looking for work. Next time the (extended) unemployment benefits will be tapped out, public employees will be laid off; we will see some really bad things."
Yesterday's stock market plunge, which is being repeated in Asian and European markets so far today, will precipitate what the Federal Reserve and Ben Bernanke were planning all along - QE3 - which could represent a terminal blow for the already stricken U.S. dollar. Helicopter Ben will flood the money supply with more fake greenbacks, the artificially inflated stock market will briefly rally once more, and all the suckers will plough all their money back in only to get burned again later down the line.
Smart and sober realists who doggedly stuck to the unspectacular but reliable safe havens of gold, silver and other stores of wealth, will once again preserve the value of their assets.
As Marc Faber told Bloomberg yesterday, " "Stocks will be dropping 30%, then rallying 20%, and dropping another 30% - that's going to be the pattern. And whoever can't live with that shouldn't be buying equities at all."
Faber warns "there is a case to be ultrabearish about everything, and markets are going to go lower," adding that next week will give us a clearer picture of exactly how much enthusiasm Bernanke has for hammering the final nail in the dollar's coffin with the launch of QE3.
Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a regular fill-in host for The Alex Jones Show.